Citi sees Dick’s Sporting Goods topping Q2 expectations but remains cautious

Citi analysts raised the price target on Dick’s Sporting Goods (NYSE:) to $153 from $135 in a note Tuesday while maintaining a Neutral rating on the stock.

Assessing the company’s upcoming 2Q results on August 22 before the open, analysts told investors that they expect a earnings and sales beat and for the company to maintain guidance.

“We believe the dynamics that drove comp strength in 1Q continued in 2Q (strong footwear/apparel growth from key vendors, resilient higher-income customer),” wrote analysts.

“We anticipate mgmt will maintain F23 guidance of $12.90-13.80, implying comps -LSD in 2H (against more difficult comparisons). Given upside in the biz in 1H, we believe F23 guidance is more achievable,” they added.

Furthermore, the analysts explained that as positioning is skewed negatively into the print, they see the risk/reward as balanced to positive near-term, and they do not forecast any weakness or guidance reduction.

However, Citi remains cautious on its 12-month view as “comps are likely to be pressured over the next 4 quarters from difficult comparisons/lack of innovation in the athletic apparel/footwear market, ultimately limiting possible upside to shares beyond our TP.”